BLOG: Growth of the outsourcing industry

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What comes to mind when you hear the word outsourcing? You may think about call centers, graveyard shifts, clients from Western countries… these are all true, but not always. Indeed, the Philippines was first known in the global outsourcing arena as an ideal location for voice-based work, and the numerous call centers that have emerged in Metro Manila and nearby provinces are a tangible proof of this perception.

However, do not think that the country’s outsourcing industry is now stuck with handling calls. Service providers have already expanded their offerings to take on other business needs. You will find companies offering services such as web design and development, transcription, SEO/SEM, creative writing, site and community moderation, virtual assistance, as well as accounting, analytics, and research.

Where does the Philippines stand when it comes to outsourcing? UK’s National Outsourcing Association had named the country “Offshoring Destination of the Year” not once but thrice! The first was in 2007, then in 2009, and 2010. This further proves that the Philippines has what it takes to become a location of choice for business process outsourcing (BPO) work.

Knowing that there are many outsourcing destinations, how can the Philippines compete and remain a major player in the global market? Well, the country has the right ingredients that attract clients to outsource work to the Filipinos. First of all, cost reduction is a major reason companies outsource, and the Philippines offers relatively lower operational and labor costs, enabling Western firms to save up to 70%. There is also a large pool of highly skilled, English-speaking talent. The country produces about half a million graduates annually, with skills that are suitable for outsourced work. In addition to that, the outsourcing industry has become one of the key drivers for economic growth, that is why the government is pushing for much better infrastructure and telecommunications setup that contributes to the BPO-friendly business environment. Training programs are also implemented to further hone the skills of the Filipino workforce.

Based on the “IT-BPO Roadmap 2011-2016: Driving Global Leadership”, funded by the Commission on Information and Communications Technology (CICT) and developed by Everest Group and Outsource2Philippines for the Business Processing Association of the Philippines (BPAP), the Philippine outsourcing industry can post annual revenues reaching $25 billion and employ 1.3 million Filipinos by 2016 if it can stay competitive and leverage the support from the government. With the way things are going, this goal is not far-fetched.